Major Tech Firms Pressure FCC to Stay the Net Neutrality Course

By David Jones
Jul 18, 2017 12:53 PM PT

The
Internet Association, which represents 40 of the United States' leading technology companies -- including Facebook, Google, Amazon and others -- on Monday filed comments with the Federal Communications Commission, urging it to maintain Net neutrality regulations enacted during the Obama administration.

The rules have created a level playing field that has helped fuel innovation in the broadband Internet space, according to IA, and any attempt to unravel them could have a disruptive impact on the industry.

Good for the Economy?

The 2015 Net neutrality rules not only were upheld in a 2016 court decision, but also have helped spur investment in the tech sector, notes the filing, submitted by Internet Association President Michael Beckerman and General Counsel Abigail Slater. The rules also helped accelerate a critical new cloud computing economy that would be hurt if they should be overturned.

"Clear rules of the road have given edge-based apps and services the certainty needed to attract investment and growth without being concerned about ISPs acting as gatekeepers," states the IA document, "and the growth of these services has driven demand for faster and better broadband access," which has led to continued ISP investment and broadband subscriptions.

The 2015 rules, which prevent ISPs from blocking, throttling speeds or biasing Web traffic, have come under intense scrutiny since new FCC Chairman Ajit Pai outlined plans in an April speech to roll back the regulations as part of a broader effort by the Trump administration to loosen government control over various business entities.

Investment has increased since the Net neutrality rules were enacted -- including a 5.3 percent, or US$7.3 billion, increase in telecom investment by publicly traded companies, along with a 56 percent, or $89.9 billion, increase in cable investment since 2009, the Internet Association reported.

Implementation Is Key

Major technology companies and advocacy organizations have made a concerted effort to prevent the FCC from unraveling Net neutrality rules, a move that they argue could tip the delicate balance of fair competition and plunge a stable investment climate into chaos and uncertainty.

"Depending on how the Net neutrality policies are implemented, they can impact the cost and performance of cloud services," noted managing director at ThinkStrategies.

They could "give the advantage to cloud service providers that can package and price their offerings to best match the price needs and expectations of their target markets," he told the E-Commerce Times.

"This could have huge implications for companies providing services over the Internet, especially if they compete with the carrier/service provider in any way," noted Jim McGregor, principal analyst at Tirias Research.

"It may also allow the carrier/service provider to hold companies hostage for higher fees in exchange for higher bandwidth," he told the E-Commerce Times.

Arcane and Overreaching?

Verizon also submitted comments to the FCC Monday afternoon. The company called for changes to the Title II provisions of the 2015 Net neutrality regulations, which essentially designate broadband Internet to as a public utility for regulatory purposes.

"That arcane price and service scheme -- written for 19th Century railroad and early 20th Century telephone monopolies -- doesn't fit today's fast paced and competitive Internet," Verizon's filing states.

The regulations invite regulatory overreach, the company argues, citing attempts to investigate free data programs and further providing a framework for price regulation.

The American Cable Association also filed comments Monday, asking the FCC to remove the Title II regulations, which it says places an undue burden on small ISPs.

One such provider is Sjoberg's -- a cable and Internet service provider in Thief River Falls, Minnesota, serving 6,800 customers.

Its borrowing costs increased by 1 percent after the regulations were enacted, Sjoberg said, due to concerns about the financial feasibility of network investments. Sjoberg suspended the deployment of a Netflix caching device to lower transport costs, amid fears of being in violation of the regs. It also suspended data caps.

However, the backlash against the FCC likely will result in some form of compromise legislation, suggested Christopher Mitchell, director of community broadband networks at the
Institute for Local Self-Reliance, which advocates for more competition in rural areas.

"I think the FCC and Pai will continue muddling around with repealing [Net neutrality] but not finish it," he told the E-Commerce Times, "because of the outrage from the public and many businesses that fear giving AT&T and Comcast still more power over the economy."

David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.